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Hasbro To Sell Games to Infogrames PROVIDENCE, R.I. (AP) - Hasbro Inc. warned its fourth quarter earnings will fall below expectations and said full-year earnings would be break-even "at best". The warning came as the toy maker announced the sale of its interactive games divisions and licensing of many of its most well-known products to Infogrames Entertainment for $100 million. Shares of the Pawtucket-based company fell 16 percent to $9.69 a share in after-hours trading after finishing the regular session down 19 cents at $11.56 on the New York Stock Exchange. Hasbro said it may post a loss for fiscal 2000 of 10 cents and 20 cents a share before one-time items. Analysts surveyed by First Call/Thomson Financial had pegged earnings for the year at 43 cents per share. Estimates for the quarter had been 23 cents per share. "The reduced expectations can be attributed in large part to the decline in worldwide revenue of trading card games. Frankly, while Pokemon Trading Card Game cards are still selling well, we were too aggressive in our forecast following incredible demand in 1999 and 2000," said Alan G. Hassenfeld, chairman and CEO. Hasbro will halve its quarterly dividend to 3 cents from 6 cents per share, effective Feb. 15. The move is expected to save $21 million annually. The company also has increased the number of planned job cuts, from up to 550 announced in October, to 750 jobs. The sale of Hasbro Interactive gives the company a long-term revenue stream and relieves the company of two divisions that have lost a significant amount of money in the last two years, spokesman Wayne Charness said. "This has been a difficult business for us," he said. "This partnership is an important step toward sustaining long-term profitability.'' Infogrames, which makes games for PlayStation and Nintendo, will acquire Hasbro Interactive, based in Beverly, Mass., and Games.com, Hasbro's game portal on the Web. The French company will get full rights to Atari and Micropose, including the popular Roller Coaster Tycoon game. Infogrames also will gain exclusive rights for 15 years to develop interactive versions of Hasbro products such as Monopoly, Scrabble and Mr. Potato Head. Charness would not say how much Hasbro expects to earn from the licensing deal. Infogames will pay Hasbro $5 million cash and $95 million in stock for all the outstanding shares of Hasbro Interactive. The sale, which requires regulatory and shareholder approval, is expected to close by the end of the first quarter of 2001. a second one says: Infogrames Entertainment to Acquire Hasbro Interactive and Games.com LYON, France & PAWTUCKET, R.I.--(BUSINESS WIRE)--Dec. 6, 2000--Infogrames Entertainment SA (Euronext 5257) and Hasbro, Inc. (NYSE:HAS) jointly announced today that they have entered into a strategic agreement, creating one of the foremost powerhouses in the mass market digital interactive entertainment world. The agreement is comprised of three main elements, including the Infogrames acquisition of Hasbro Interactive; a long-term licensing agreement giving Infogrames exclusive rights to develop and publish digital interactive games based on current and future Hasbro properties on all existing and future digital interactive formats; and the acquisition of Games.com. Infogrames will purchase 100% of the common stock of Hasbro Interactive and Games.com for $100 million - comprised of $95 million in Infogrames Entertainment SA securities (approximately 4.5 million common shares) and $5 million in cash. In addition, Hasbro will receive an annual guarantee from Infogrames based on sales generated from the licensing agreement. The agreements are subject to the approval of the shareholders of Infogrames, regulatory approval and other customary closing conditions. The companies expect the deal to close early in the first calendar quarter of 2001. "Infogrames and Hasbro are truly poised to become worldwide leaders in the digital entertainment market," said Bruno Bonnell, Chairman and CEO of Infogrames. "Infogrames' external growth strategy consists of three requirements: a willingness of the prospective partner's management to share our strategic vision, a complementary set of skills and products, and finally, value for our shareholders. The Hasbro Interactive and Games.com acquisition meets these criteria," said Mr. Bonnell. "Infogrames' access to Hasbro's long list of well-known properties fits perfectly with our long-term publishing strategy to become the leader in family entertainment. The terms are beneficial for Infogrames Entertainment, since they have no direct impact on the company's future investment capacity." "This arrangement with Infogrames is a very positive one for Hasbro on many different levels," said Alan Hassenfeld, Hasbro's Chairman and CEO. "First, we have aligned ourselves with a premier player in the interactive arena. Second, this strategic agreement with Infogrames meshes with our strategy of reducing costs as we focus on consistently delivering profits going forward. Third, this arrangement will provide a continuing revenue stream to Hasbro over the long-term through Infogrames' expertise in leveraging our current and future properties." The agreement is comprised of three main elements: Infogrames Entertainment's acquisition of 100% of the common stock of Hasbro Interactive, a subsidiary of Hasbro, Inc. The acquisition gives Infogrames a catalog of titles based on well-known properties, including: --The MICROPROSE brand and titles, including the international hit CIVILIZATION, FALCON, and ROLLER COASTER TYCOON, the number one selling PC game in the US according to PC DATA'S latest report. --The legendary ATARI name and properties, such as CENTIPEDE, MISSILE COMMAND, and the historic PONG, which pioneered the video game revolution. The exclusive rights to develop and publish interactive games based on current and future Hasbro, Inc. properties, including: --The interactive versions of popular Hasbro board games, which include MONOPOLY, SCRABBLE(1), CLUE, RISK, AND BOGGLE. --The interactive versions of children's games and toys, such as MR. POTATO HEAD, TONKA TRUCKS, ACTION MAN, MY LITTLE PONY, and CANDYLAND. --The massively multi-player game DUNGEONS AND DRAGONS. Under the terms of the agreement, Infogrames gains the rights through a licensing agreement with Hasbro to develop games based on Hasbro properties for a period of 15 years plus an option for an additional 5 years based on performance, on all existing and future digital interactive formats. Terms of the licensing agreement are consistent with other traditional Infogrames' Entertainment licensing agreements. These formats include: current and next-generation video game consoles such as Sony PlayStation2, Microsoft Xbox, Sega Dreamcast, and Nintendo GameBoy Advance and GameCube, personal computers, broadband networks, interactive television, cellular telephones, arcade, and hand-held devices (PDAs). In keeping with its global multi-platform strategy, Infogrames will leverage Hasbro's unmatched content by developing titles on a variety of platforms that appeal to a global market. These Hasbro Interactive brands, together with Hasbro's owned brands, make up a catalog of more than 200 family titles that are being managed by a team of mass market product experts who have helped Hasbro Interactive succeed in becoming the third largest PC publisher in the U.S. Additionally, approximately 60 titles are currently in development, including PlayStation2 and Xbox versions of franchises from HASBRO, MICROPROSE and ATARI: ZOO TYCOON, MONOPOLY, MICRO MACHINES, TWISTER, CIRCUS MAXIMUS, CIVILIZATION, AND GRAND PRIX 4. Infogrames will also seek out additional partnership opportunities with telecommunications providers, media companies and hardware manufacturers to bring these franchises to other platforms. The long term licensing agreement combines Hasbro's expertise in developing successful mass-market properties and Infogrames' expertise in bringing top properties to the digital interactive market. Hasbro's catalog of games and toys will be strengthened by their digital interactive counterparts, published and globally distributed by Infogrames. In addition, Infogrames' titles based on Hasbro properties will benefit from Hasbro's powerful marketing programs for their games and toys. Acquisition of Games.com As part of the agreement, Infogrames acquires Games.com, an online games portal launching in early 2001. Games.com has already attracted over four million visitors to its site, with more than one million people having already registered to receive information about its launch. At its launch, Games.com will allow visitors to play more than 30 online games based on Hasbro properties, some of which include MONOPOLY, CLUE, SCRABBLE(1), ASTEROIDS, and RISK. In addition, visitors to the site can find news, information, tips and hints about games featured on Games.com. Visitors to the site will also have the ability to chat with other players and participate in tournaments based on widely recognized games from the Hasbro catalog. Games.com's revenue strategy includes e-commerce, sponsorships and individual subscriptions. Infogrames plans to extend Games.com to broadband users in the future. JP Morgan & Lazard Freres advised Infogrames and Salomon Smith Barney advised Hasbro in this financial transaction. For additional information, Infogrames has posted a detailed presentation on today's announcement at www.infogrames.com and www.infogrames-corporate.com. Infogrames Entertainment SA (Euronext 5257) is a worldwide leader in the interactive entertainment software industry. Headquartered in France, the company publishes and distributes award-winning computer and video games for the PlayStation(R) game console, PlayStation(R) 2 computer entertainment system, Microsoft(R) Xbox, Nintendo(R) 64, Nintendo(R) Game Boy(R) Color, Sega(R) Dreamcast(TM), Macintosh(R), and personal computer platforms, as well as interactive digital television platforms, mobile smart devices (WAP, HDML) and in-flight entertainment systems. Founded in 1983 by chairman and CEO Bruno Bonnell, Infogrames has published many award-winning franchises in its 17-year history, such as Alone In The Dark(TM), Test Drive(R), Driver(TM), Deer Hunter(R), Oddworld(TM), Unreal(TM), and V-Rally(TM). The company is also known for its best-selling and award-winning line of children's entertainment software from Humongous Entertainment(R) starring Putt-Putt(R), Freddi Fish(TM), Pajama Sam(R) and SPY Fox(TM), as well as its successful Macintosh publishing label, Macsoft, the number one publisher of Macintosh entertainment software. In addition, Infogrames has a number of key strategic licenses including Warner Bros. Looney Tunes(TM), Nickelodeon's Blue's Clues(TM), AM General Hummer(R), and Harley-Davidson(R). Infogrames distributes its games in approximately 60 different countries worldwide. For more information, visit Infogrames' US Web site at www.us.infogrames.com. Based in New York, NY, Infogrames, Inc. (Nasdaq: IFGM) is a majority-owned subsidiary of Infogrames Entertainment SA and serves as the headquarters for the company's operations in North America. Hasbro is a worldwide leader in children's and family leisure time entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. Both internationally and in the U.S., its PLAYSKOOL, TONKA, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER and WIZARDS OF THE COAST brands and products provide the highest quality and most recognizable play experiences in the world. SAFE HARBOR STATEMENT Certain statements contained in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as "anticipate", "believe", "could", "expect", "intend", "may", "planned", "potential", "should", "will" and "would". Such forward-looking statements are inherently subject to known and unknown risks and uncertainties. Actual actions or results may differ materially from those expected or anticipated in the forward-looking statements. Specific factors that might cause such a difference include, but are not limited to, third party actions or approvals that could delay or increase the cost of implementation of the strategic agreement or alter actions and reduce actual results; the risk that anticipated benefits of the strategic agreement may not occur or be delayed or reduced in their realization; and with respect to the online game site initiative, technical difficulties in adapting games to online format and establishing the online game site that could delay or increase the cost of the site becoming operational; the acceptance by consumers of the games and other products and services to be offered at the site; competition from other online game sites and other game playing formats; and the fact online game revenues may not be sufficient to cover the significant advertising and other expenditures required or the support, service and product enhancement demands of online users. There is no undertaking of an obligation to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release. (1) In the United States only. |
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